ST May 20, 2007
Being rich: It's not how much you make, it's how much you saveBy Author, Sean Toh

taken from Mr Wang's entry
MANY people think you have to make lots of money in order to be rich.

I will tell you now that knowing how to make lots of money will not make you wealthy.

You could make $10,000 a month, but still be poor if you spend $15,000 a month because of your luxurious lifestyle.

However, if you make $5,000 a month and your monthly expenses total only $2,500, you could save up to $2,500 every month for a period of up to 30 years.

You would then have accumulated $900,000 including interest.

You will realise that being wealthy is all about how much money you are able to keep and not how much you make.
If you put it in simple mathematical terms, it becomes quite clear how it works. But in day-to-day life, many people still fail to intuitively grasp it.

Even ex-world heavyweight boxing champion Mike Tyson can go bankrupt. And his total career earnings were in the region of USD 300 million. Mathematically, all you have to do to go bankrupt, when you have USD 300 million, is to spend more than USD 300 million. Which he promptly did.

Poor chap has reduced to such a state that he had to consider pursuing a new career in the porn movie industry.

Mike isn't unique. This article talks about various celebrities and ex-celebrities who also went bust. How on earth do you go bust, if you have No. 1 singles and produce best-selling albums, like famous pop stars do? Mathematically, as I said, it's quite simple. Your expenditure simply needs to grow faster than your income.

How much have you ever spent buying flowers? $20 per bouquet? $80, or $150, on Valentine's Day? In a 20-month period, Elton John spent USD $205,774 on flowers alone.

Personally, I am not a stingy person. It's just that things which interest me have a tendency to be cheap or free. Like blogging; running; meditation; playing the guitar; swimming; reading; writing. Lucky me.

Yoga is something else I'd like to take up someday. Initially, you'd have to pay for classes, but I think eventually, it's something that you do on your own, at home. All equipment is optional, other than your own body - which is free.

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conclusion to me
"Its not how much your pay is, its how much of your pay u can actually save minus the expenses and committements."